RÉSUMÉ DIGEST
ACT 592 (HB 795) 2016 Regular Session Stokes
Existing law requires the Dept. of Revenue to annually prepare a tax exemption budget
detailing the prior tax years tax exemptions, including whether each exemption is meeting
its purpose, whether the purpose is being achieved in a fiscally effective manner, and whether
there are any inadvertent consequences caused by the tax exemption.
New law adds a requirement that tax exemptions be organized in a schedule as follows:
(1)Agricultural/Rural: pertains to a business or person being located in a rural area or
engaging in an agricultural trade or business.
(2)Business Environment: encourages competitiveness with other states by impacting
the tax burden of business entities that engage in specific activities, including the
following:
(a) Inventory Tax Ad Valorem
(b) Business Utilities Sales Tax
(c) Manufacturing Machinery and Equipment
(d) Direct Inputs and Consumables
(3) Corporate Income Tax Formula: relates to assisting, guiding, or aiding a business
entity in determining the amount of its income for La. tax purposes.
(4) Dealers and Vendors Compensation and Discounts: encourages timely filing of a
return, report, form, or document or the timely payment of a tax, fee, or other amount
due.
(5) Educational Breaks for Educational Institutions: pertains to an entity that engages in
a specified activity that provides or facilitates the act of learning.
(6) Educational Breaks for Individuals: pertains to an individual who engages in a
specified activity that is beneficial to, provides, or facilitates the act of learning.
(7) Incentives: encourages a particular or specified economic activity by modifying the
tax burden of the economic activity or behavior, administered through contracts with
one of the following:
(a) Department of Economic Development
(b) Department of Culture, Recreation, and Tourism
(c) Department of Environmental Quality
(d) Department of Revenue
(8) Louisiana Constitutional Mandates: outlined in the La. constitution that modifies the
tax burden.
(9) Non-itemized Sales and Use Tax Exclusions and Exemptions: not individually
itemized on a La. sales tax return before March 2016.
(10) Normal Tax Structure: prevents double taxation, direct business inputs, or violation
of federal law, including the following:
(a) Federal Mandatory
(b) Intergovernment (c) Interstate Commerce
(d) Net Operating Loss
(e) Normal Severance
(11) Personal Income Tax Formula: assists, guides, or aids an individual in determining
La. tax table income after determining La. adjusted gross income.
(12) Retirement, Disability, and Military: modifies the tax owed by individuals who
receive money, including wages and interest, as a result of a special status or position
in life that is recognized by statute.
(13)Specialty Sales Tax Exemptions, including the following:
(a) Sales tax holidays
(b) Purchase of a specific item
(c) Purchase made by a specific taxpayer
(d) Activities of a specific group or organization
(14)Specialty Income Tax Exemptions, including the following:
(a) Performance of a specific activity
(b) Purchase of a specific item
(c) Purchase made by a specific taxpayer
New law prohibits tax exemptions from being organized into more than one of the
enumerated categories unless there is a specific notation for doing so and authorizes the
secretary to add additional categories if deemed necessary.
Effective July 1, 2016.
(Amends R.S. 47:1517(B))